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backdoor Roth Conversion

Forum|Forum|4 years ago
February 22, 2022
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I'm 71 and retired and have an existing 6 figure IRA. I took $25k from this IRA and converted it to a Roth IRA (a backdoor IRA?) I also cashed out about 20K from the same IRA during the year. My single 1099R only shows the $45k total withdrawal. How do I enter this in TurboTax? When I try to go through the "IRA Contributions" section, I'm getting a message that says i've exceeded the contribution limit. Thanks for the help.

Best answer by RaifH

No, nothing needs to be done in the IRA Contribution section. Since this is a conversion, not a contribution, it does not need to be entered there. The system is saying you over-contributed because the maximum contribution is only $7,000 or your earned income for the year, whichever is less.

M

MAK70

After you enter the 1099-R information, you will answer a few follow-up questions (this will be after you see the 1099-R Summary). Look for the screen below where you can indicate the ROTH conversion.

You have a conversion when you move assets held in a non-Roth IRA (traditional IRA, SEP IRA, or SIMPLE IRA) to a Roth IRA. It’s called a conversion because you are moving the money from a pre-tax account to an after-tax account. When you convert to a Roth IRA, you pay tax on the taxable portion of your distribution.

A

ab20422Author

Yes. I have that done and entered the portion of the amount that was converted to a Roth. Do I then also need to enter this in the "Traditional and Roth Contributions" section? If I try to do that, it tells me that a) I owe additional taxes on the amount, and b) that the contribution amount exceeds the allowable amount. How do I enter it in that section? Thanks.

R

RaifHAnswer

No, nothing needs to be done in the IRA Contribution section. Since this is a conversion, not a contribution, it does not need to be entered there. The system is saying you over-contributed because the maximum contribution is only $7,000 or your earned income for the year, whichever is less.